Brazil’s big oil auction has investors eager but wary

A protester leaps through tear gas fired by police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A protester leaps through tear gas fired by police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, ... more

Photo: Mario Tama / Getty Images

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A man displays his wound during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters demonstrated outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A man displays his wound during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, ... more

Photo: Mario Tama / Getty Images

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A bloodied protester is helped after being injured during clashes with the national guard at a protest against the auction of the Libra oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements. (AP Photo/Felipe Dana) less

A bloodied protester is helped after being injured during clashes with the national guard at a protest against the auction of the Libra oil field near the Windsor hotel where the auction is taking place, on ... more

Photo: Felipe Dana / Associated Press

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A masked protester passes a fire during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A masked protester passes a fire during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de ... more

Photo: Mario Tama / Getty Images

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A masked protester passes a fire during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A masked protester passes a fire during demonstrations outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de ... more

Photo: Mario Tama / Getty Images

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A protester throughs a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A protester throughs a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio ... more

Photo: Mario Tama / Getty Images

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A naval boat patrols off the coast while soldiers block access to the Windsor Barra Hotel in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a Rio de Janeiro hotel where companies including China National Petroleum Corp., Royal Dutch Shell Plc and Total SA are expected to vie for one of the worlds two largest offshore fields at 3 p.m. local time, as oil workers protest the concession. Photographer: Dado Galdieri/Bloomberg less

A naval boat patrols off the coast while soldiers block access to the Windsor Barra Hotel in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a ... more

Photo: Dado Galdieri / Bloomberg

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A naval boat patrols off the coast near the Windsor Barra Hotel while a man paddleboards in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a Rio de Janeiro hotel where companies including China National Petroleum Corp., Royal Dutch Shell Plc and Total SA are expected to vie for one of the worlds two largest offshore fields at 3 p.m. local time, as oil workers protest the concession. Photographer: Dado Galdieri/Bloomberg less

A naval boat patrols off the coast near the Windsor Barra Hotel while a man paddleboards in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a ... more

Photo: Dado Galdieri / Bloomberg

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A protester throws a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A protester throws a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio ... more

Photo: Mario Tama / Getty Images

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A soldier stands outside the Windsor Barra Hotel in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a Rio de Janeiro hotel where companies including China National Petroleum Corp., Royal Dutch Shell Plc and Total SA are expected to vie for one of the worlds two largest offshore fields at 3 p.m. local time, as oil workers protest the concession. Photographer: Dado Galdieri/Bloomberg less

A soldier stands outside the Windsor Barra Hotel in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a Rio de Janeiro hotel where companies ... more

Photo: Dado Galdieri / Bloomberg

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A naval boat patrols off the coast near the Windsor Barra Hotel while a man carries a surf board on the beach in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ships are guarding a Rio de Janeiro hotel where companies including China National Petroleum Corp., Royal Dutch Shell Plc and Total SA are expected to vie for one of the worlds two largest offshore fields at 3 p.m. local time, as oil workers protest the concession. Photographer: Dado Galdieri/Bloomberg less

A naval boat patrols off the coast near the Windsor Barra Hotel while a man carries a surf board on the beach in Rio de Janeiro, Brazil, on Monday, Oct. 21, 2013. Soldiers, army vehicles, helicopters and navy ... more

Photo: Dado Galdieri / Bloomberg

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A bystander raises his arms a military police approach while guarding outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A bystander raises his arms a military police approach while guarding outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 ... more

Photo: Mario Tama / Getty Images

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Military police fire tear gas toward protesters outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

Military police fire tear gas toward protesters outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, ... more

Photo: Mario Tama / Getty Images

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Military police fire tear gas toward protesters outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

Military police fire tear gas toward protesters outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, ... more

Photo: Mario Tama / Getty Images

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Protesters use found devices to take cover from police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

Protesters use found devices to take cover from police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de ... more

Photo: Mario Tama / Getty Images

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A protester kicks a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A protester kicks a tear gas canister back towards police outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds was being held on October 21, 2013 in Rio de ... more

Photo: Mario Tama / Getty Images

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A bystander looks on as military police guard outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

A bystander looks on as military police guard outside the seafront Windsor Barra hotel where an auction of one of the world's biggest offshore oil finds is occuring on October 21, 2013 in Rio de Janeiro, ... more

Photo: Mario Tama / Getty Images

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Military police stand guard outside the seafront Windsor Barra hotel before the start of an auction of one of the world's biggest offshore oil finds on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is auctioning its Libra offshore oilfield which holds between 8-12 billion barrels of oil and protesters are demonstrating outside the hotel against the participation of foreign oil companies. (Photo by Mario Tama/Getty Images) less

Military police stand guard outside the seafront Windsor Barra hotel before the start of an auction of one of the world's biggest offshore oil finds on October 21, 2013 in Rio de Janeiro, Brazil. Brazil is ... more

Photo: Mario Tama / Getty Images

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Masked protesters turn over a vehicle from TV Record during a demonstration against the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements. (AP Photo/Felipe Dana) less

Masked protesters turn over a vehicle from TV Record during a demonstration against the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca ... more

Photo: Felipe Dana / Associated Press

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Masked protesters shield themselves during clashes with the National Guard as they demonstrate against the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements, and the demonstration was called by striking oil workers, whose union has long been against any foreign involvement in Brazils petroleum production. (AP Photo/Felipe Dana) less

Masked protesters shield themselves during clashes with the National Guard as they demonstrate against the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on ... more

Photo: Felipe Dana / Associated Press

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A National Guard officer fires rubber bullets at demostrators protesting the auction of the Libra offshore oil field near the hotel where the auction takes place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements, and the demonstration was called by striking oil workers, whose union has long been against any foreign involvement in Brazils petroleum production. (AP Photo/Felipe Dana) less

A National Guard officer fires rubber bullets at demostrators protesting the auction of the Libra offshore oil field near the hotel where the auction takes place, on Barra da Tijuca beach in Rio de Janeiro, ... more

Photo: Felipe Dana / Associated Press

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National Guard officers clash with demonstrators, top, protesting the auction of the Libra oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. The vehicle was turned over by protesters and belongs to TV Record. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements. (AP Photo/Felipe Dana) less

National Guard officers clash with demonstrators, top, protesting the auction of the Libra oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, ... more

Photo: Felipe Dana / Associated Press

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Demonstrators clash with the National Guard as they protest the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on the Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements. (AP Photo/Felipe Dana) less

Demonstrators clash with the National Guard as they protest the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on the Barra da Tijuca beach in Rio de Janeiro, ... more

Photo: Felipe Dana / Associated Press

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Masked protesters throw rocks at the National Guard during a demonstration against the auction of the Libra offshore oil field near the hotel where the auction takes place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements, and the demonstration was called by striking oil workers, whose union has long been against any foreign involvement in Brazils petroleum production. (AP Photo/Felipe Dana) less

Masked protesters throw rocks at the National Guard during a demonstration against the auction of the Libra offshore oil field near the hotel where the auction takes place, on Barra da Tijuca beach in Rio de ... more

Photo: Felipe Dana / Associated Press

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Protesters hold signs of President Barack Obama that read in Portuguese "Auction is privatization!" as they demonstrate against the auction of the Libra offshore oil field near the Windsor hotel where the auction is taking place, on Barra da Tijuca beach in Rio de Janeiro, Brazil, Monday, Oct. 21, 2013. Monday's oil auction is the first in Brazil since the government created new production-sharing agreements, and the demonstration was called by striking oil workers, whose union has long been against any foreign involvement in Brazils petroleum production. (AP Photo/Felipe Dana) less

Protesters hold signs of President Barack Obama that read in Portuguese "Auction is privatization!" as they demonstrate against the auction of the Libra offshore oil field near the Windsor hotel where the ... more

Photo: Felipe Dana / Associated Press

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A Brazil's Forca Nacional security member aims his shotgun at ctivists demonstrating in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de Tijuca, Rio de Janeiro, Brazil on October 21, 2013. Bidding on the coveted Libra oil field - which contains an estimated eight to 12 billion barrels of recoverable crude - opens Monday with 11 firms vying for a share of production. AFP PHOTO/CHRISTOPHE SIMONCHRISTOPHE SIMON/AFP/Getty Images less

A Brazil's Forca Nacional security member aims his shotgun at ctivists demonstrating in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's ... more

Photo: CHRISTOPHE SIMON / AFP/Getty Images

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People sunbath at the beach by a line of Brazil of National Force security personnel blocking the beach in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de Tijuca, Rio de Janeiro, Brazil on October 21, 2013. Bidding on the coveted Libra oil field - which contains an estimated eight to 12 billion barrels of recoverable crude - opens Monday with 11 firms vying for a share of production. AFP PHOTO/CHRISTOPHE SIMONCHRISTOPHE SIMON/AFP/Getty Images less

People sunbath at the beach by a line of Brazil of National Force security personnel blocking the beach in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one ... more

Photo: CHRISTOPHE SIMON / AFP/Getty Images

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Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de Tijuca, Rio de Janeiro, Brazil on October 21, 2013. Bidding on the coveted Libra oil field - which contains an estimated eight to 12 billion barrels of recoverable crude - opens Monday with 11 firms vying for a share of production. AFP PHOTO/CHRISTOPHE SIMONCHRISTOPHE SIMON/AFP/Getty Images less

Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de ... more

Photo: CHRISTOPHE SIMON / AFP/Getty Images

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Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de Tijuca, Rio de Janeiro, Brazil on October 21, 2013. Bidding on the coveted Libra oil field - which contains an estimated eight to 12 billion barrels of recoverable crude - opens Monday with 11 firms vying for a share of production. AFP PHOTO/CHRISTOPHE SIMONCHRISTOPHE SIMON/AFP/Getty Images less

Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de ... more

Photo: CHRISTOPHE SIMON / AFP/Getty Images

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Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de Tijuca, Rio de Janeiro, Brazil on October 21, 2013. Bidding on the coveted Libra oil field - which contains an estimated eight to 12 billion barrels of recoverable crude - opens Monday with 11 firms vying for a share of production. AFP PHOTO/CHRISTOPHE SIMONCHRISTOPHE SIMON/AFP/Getty Images less

Activists clash with security forces in front of the hotel where Brazil's National Petroleum Agency (ANP) will auction drilling rights to one of the world's largest offshore oil discoveries, in Barra de ... more

Photo: CHRISTOPHE SIMON / AFP/Getty Images

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Brazilian oil industry workers on strike demonstrate against a pre-salt auction for deep-water deposits in the huge Libra field, along Paulista Avenue in Sao Paulo, Brazil on October 17, 2013. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

Brazilian oil industry workers on strike demonstrate against a pre-salt auction for deep-water deposits in the huge Libra field, along Paulista Avenue in Sao Paulo, Brazil on October 17, 2013. On Monday, ... more

Photo: NELSON ALMEIDA / AFP/Getty Images

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Brazilian oil industry workers on strike demonstrate against a pre-salt auction for deep-water deposits in the huge Libra field, along Paulista Avenue in Sao Paulo, Brazil on October 17, 2013. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

Brazilian oil industry workers on strike demonstrate against a pre-salt auction for deep-water deposits in the huge Libra field, along Paulista Avenue in Sao Paulo, Brazil on October 17, 2013. On Monday, ... more

Photo: NELSON ALMEIDA / AFP/Getty Images

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A demonstrator holds a flag during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

A demonstrator holds a flag during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign ... more

Photo: Dado Galdieri / Bloomberg

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Demonstrators use spray paint to make banners during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

Demonstrators use spray paint to make banners during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited ... more

Photo: Dado Galdieri / Bloomberg

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Demonstrators hold a banner during a protest against oil-field auctions outside the Petrobras headquarter in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

Demonstrators hold a banner during a protest against oil-field auctions outside the Petrobras headquarter in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign ... more

Photo: Dado Galdieri / Bloomberg

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Demonstrators protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

Demonstrators protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete ... more

Photo: Dado Galdieri / Bloomberg

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A man walks past a banner reading "Dilma, oil auctions are theft" during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

A man walks past a banner reading "Dilma, oil auctions are theft" during a protest against oil-field auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year ... more

Photo: Dado Galdieri / Bloomberg

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Demonstrators stand behind a banner during a protest against oilfield auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and foreign oil companies to compete for oil acreage for the first time in five years. less

Demonstrators stand behind a banner during a protest against oilfield auctions outside the Petrobras headquarters in Rio de Janeiro, Brazil, on Thursday, Oct. 17, 2013. This year Brazil invited domestic and ... more

Photo: Dado Galdieri / Bloomberg

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Schoolchildren play on a beach in front of an oil platform near the fishing village of Jurujuba, in the suburb of Niteroi, on October 10, 2013 in Rio de Janeiro, Brazil. The colonial fishing village is challenged by urbanization as it sits at the edge of Guanabara Bay, one of the most polluted coastal areas of Brazil. less

Schoolchildren play on a beach in front of an oil platform near the fishing village of Jurujuba, in the suburb of Niteroi, on October 10, 2013 in Rio de Janeiro, Brazil. The colonial fishing village is ... more

Photo: Mario Tama / Getty Images

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Oil industry workers demonstrate against a pre-salt auction for deep-water deposits at the huge Libra field, in front of Petrobras headquartes in Rio de Janeiro on October 17, 2013. On Monday, Brazil holds its first pre-salt auction in six years for deep-water deposits at the huge Libra field in the southeastern Santos basin, holding recoverable reserves of some 12 billion barrels. less

Oil industry workers demonstrate against a pre-salt auction for deep-water deposits at the huge Libra field, in front of Petrobras headquartes in Rio de Janeiro on October 17, 2013. On Monday, Brazil holds ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

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Oil industry workers demonstrate in front of Petrobras headquarters against a pre-salt auction for deepwater deposits at the huge Libra field. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

Oil industry workers demonstrate in front of Petrobras headquarters against a pre-salt auction for deepwater deposits at the huge Libra field. On Monday, Brazil will hold its first pre-salt auction in six ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

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A banner reading "Dilma, show courage and lift the pound auction" is displayed during the occupation of the Ministry of Mines and Energy by activists protesting against a pre-salt auction of oil Libra fields in Brasilia on October 17, 2013. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

A banner reading "Dilma, show courage and lift the pound auction" is displayed during the occupation of the Ministry of Mines and Energy by activists protesting against a pre-salt auction of oil Libra fields ... more

Photo: EVARISTO SA / AFP/Getty Images

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Activists of Social Movements occupy the Ministry of Mines and Energy to protest against a pre-salt auction of oil Libra fields in Brasilia on October 17, 2013. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

Activists of Social Movements occupy the Ministry of Mines and Energy to protest against a pre-salt auction of oil Libra fields in Brasilia on October 17, 2013. On Monday, Brazil will hold its first pre-salt ... more

Photo: EVARISTO SA / AFP/Getty Images

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Activists of Social Movements occupy the Ministry of Mines and Energy to protest against a pre-salt auction of oil Libra fields in Brasilia on October 17, 2013. On Monday, Brazil will hold its first pre-salt auction in six years for deep-water deposits at the Libra field in the southeastern Santos basin, with recoverable reserves of some 12 billion barrels. less

Activists of Social Movements occupy the Ministry of Mines and Energy to protest against a pre-salt auction of oil Libra fields in Brasilia on October 17, 2013. On Monday, Brazil will hold its first pre-salt ... more

Photo: EVARISTO SA / AFP/Getty Images

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Brazil’s big oil auction has investors eager but wary

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Energy interests in Houston and elsewhere will be watching closely Monday as Brazil announces the winning bidder for its gigantic Libra field, estimated to hold up to 12 billion barrels of oil.

The auction in Rio de Janeiro will be the first since Brazil adopted new laws governing contracts for its vast pre-salt offshore regions, estimated to hold billions of barrels of crude trapped under layers of salt that once obscured their existence.

The Brazilian government says the lease terms will help the country develop its promising but nascent energy industry. Some prospective international bidders, however, contend the contracts require them to take on too much of the cost and risk of the new fields.

“The Libra auction itself is an experiment for the Brazilian government,” said Geerd Aalbers, a Rio de Janeiro-based official of Control Risks, a global risk consultant.

He said it will be the first time Brazil enters into a production sharing agreement — an arrangement under which the government’s partners bear the costs of exploration and production. Once oil starts flowing, they deduct their costs from the proceeds and split the remaining crude, called profit oil, with the government.

The Brazilian government will award the contract to the bidder that agrees to take the lowest percentage of profit oil in exchange for the investment.

“The government has tried to make it as attractive as possible to investors, but it will look at the outcome of Libra, and go back to the drawing table if it turns out it is not as successful as hoped,” Aalbers said.

Brazil will require the winning bidder to pay a $6 billion signing bonus, enter into a production-sharing arrangement and agree to meet significant local content requirements.

And a new law requires that Brazilian national oil company Petrobras be the operator of the project and own at least a 30 percent share.

Prospective participants can bid for up to 30 percent of project ownership, with the Brazilian government retaining the remaining share.

The required Petrobras share has given pause to some potential investors, who fear that the Brazilian company’s limited resources could slow work down and escalate costs.

Jose Valera, a Houston-based partner in Mayer Brown’s global energy group, said Petrobras already has the largest backlog of projects of any oil company in the world. “Bidders risk being put in the back of the line after having been required to pay what probably is the largest signature bonus in history,” Valera said.

Houston consular official Roberto Ardenghy, said the government will not delay or cancel the bid because of the strikes, though it does plan to beef up security around the auction.

“We have some political groups that are complaining about this bid,” said Ardenghy, who heads the Brazilian consulate’s Trade Promotion Bureau. “It has happened with every bid we have done in the last 10 years, because there are some groups that do not accept private investors in the oil industry.”

Yet some observers suggest the terms of the auction make it hostile to private investment.

“The look, touch and feel of this auction model are those of a left-leaning, populist government; not those of a government that deeply believes in market-driven solutions,” wrote George Baker, publisher of Mexico Energy Intelligence, in an assessment of the proposal.

Aalbers, the risk manager in Rio de Janeiro, is more measured, noting that the Brazilian government has a track record of balancing its desire to build a local industry and its social aims with a business climate that is still attractive for foreign investment.

“It is not an unsafe bet that things will probably pan out in favor of investors,” Aalbers said. “Just because it is extremely complex and uncertain, it puts off some investors, but it doesn’t mean you can’t safely navigate that environment.”

Meanwhile, Brazilian officials point to the presence of multiple international players as evidence that the auction has been accepted by the markets.

“I am optimistic that we are going to have a good bid on Monday,” Ardenghy said.

A stake in Brazil’s bounty

Eleven companies will bid in the auction of Brazil’s offshore Libra field*:

Petrogal Brazil

Petróleo Brasileiro

Repsol Sinopec Brazil

Oil Shell Brazil

CNOOC International (China)

CNPC International (China)

Ecopetrol (Colombia)

Mitsui & Co. (Japan)

ONGC Videsh (India)

Petronas Carigali (Malaysia)

Total (France)

* Petrobras, Brazil’s state oil company, is required by law to have a minimum 30 percent stake in the project, but may participate in a bid for a larger share. Ecopetrol and ONGC Videsh may participate only as part of a group bid, because they did not pay the $74 million guarantee deposit required for individual bids.

Brazil Justice Minister Jose Eduardo Cardozo (left) and Petrobras President Maria das Gracas Silva Forster (2nd-left) celebrate at the end of the auction for developing huge pre-salt oil deposits found six years ago in deep water off Brazil's Atlantic coast, in Rio de Janeiro, Brazil, on October 21, 2013. China's CNOOC and CNPC, Anglo-Dutch giant Royal Dutch Shell and France's Total joined Brazilian state operator Petrobras in a joint bid to win Monday's auction to develop the huge Libra oilfield. The four energy giants won 35-year concessions, with Petrobras taking a 40 percent stake. Shell and Total both secured a 20 percent stake, with CNOOC and CNPC taking 10 percent each. less

Brazil Justice Minister Jose Eduardo Cardozo (left) and Petrobras President Maria das Gracas Silva Forster (2nd-left) celebrate at the end of the auction for developing huge pre-salt oil deposits found six ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

Image 2 of 27

View of the auction for developing huge pre-salt oil deposits found six years ago in deep water off Brazil's Atlantic coast in Rio de Janeiro, Brazil, on October 21, 2013. China's CNOOC and CNPC, Anglo-Dutch giant Royal Dutch Shell and France's Total joined Brazilian state operator Petrobras in a joint bid to win Monday's auction to develop the huge Libra oilfield. The four energy giants won 35-year concessions, with Petrobras taking a 40 percent stake. Shell and Total both secured a 20 percent stake, with CNOOC and CNPC taking 10 percent each. less

View of the auction for developing huge pre-salt oil deposits found six years ago in deep water off Brazil's Atlantic coast in Rio de Janeiro, Brazil, on October 21, 2013. China's CNOOC and CNPC, Anglo-Dutch ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

Image 3 of 27

Brazil's Mines and Energy Minister Edson Lobao delivers a speech during the auuction for developing huge pre-salt oil deposits found six years ago in deep water off Brazil's Atlantic coast in Rio de Janeiro, Brazil, on October 21, 2013. China's CNOOC and CNPC, Anglo-Dutch giant Royal Dutch Shell and France's Total joined Brazilian state operator Petrobras in a joint bid to win Monday's auction to develop the huge Libra oilfield. The four energy giants won 35-year concessions, with Petrobras taking a 40 percent stake. Shell and Total both secured a 20 percent stake, with CNOOC and CNPC taking 10 percent each. less

Brazil's Mines and Energy Minister Edson Lobao delivers a speech during the auuction for developing huge pre-salt oil deposits found six years ago in deep water off Brazil's Atlantic coast in Rio de Janeiro, ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

Image 4 of 27

The Petrobras offshore ship platform FPSO Cidade de Angra dos Reis is shown on Oct. 28, 2010, the day the first oil sample was taken from the pre-salt layer of Tupi field in Santos Bay off the coast of Rio de Janeiro, Brazil. less

The Petrobras offshore ship platform FPSO Cidade de Angra dos Reis is shown on Oct. 28, 2010, the day the first oil sample was taken from the pre-salt layer of Tupi field in Santos Bay off the coast of Rio de ... more

Photo: Felipe Dana / ASSOCIATED PRESS

Image 5 of 27

Ships try to control an oil spill in an offshore field operated by Chevron at the Bacia de Campos, in Rio de Janeiro state, Brazil on Nov. 13, 2011. Seventeen oil company executives faced criminal charges in March 2012, for the oil leak in the Atlantic, a legal action that prompted debate about whether it could slow Brazil's effort to develop its massive offshore finds. At least 110,000 gallons (416,000 liters) of oil seeped through cracks on the ocean floor near a Chevron Corp. appraisal well off the Rio de Janeiro coast in November 2011. less

Ships try to control an oil spill in an offshore field operated by Chevron at the Bacia de Campos, in Rio de Janeiro state, Brazil on Nov. 13, 2011. Seventeen oil company executives faced criminal charges in ... more

Photo: Associated Press

Image 6 of 27

Vessels work to clean up an oil spill in an offshore field operated by Chevron at the Bacia de Campos, in Rio de Janeiro state, Brazil. Transocean Ltd. was the drilling contractor for the well. Oil started leaking at the site of the Chevron appraisal well Nov. 7, 2011 about 230 miles off the northeastern coast of Rio de Janeiro state. less

Vessels work to clean up an oil spill in an offshore field operated by Chevron at the Bacia de Campos, in Rio de Janeiro state, Brazil. Transocean Ltd. was the drilling contractor for the well. Oil started ... more

Photo: Rogerio Santana / Associated Press

Image 7 of 27

Brazil's then-President Luiz Inacio Lula da Silva covers his hands with the first production oil sample from the pre-salt layer of Tupi field as he visits a Petrobras offshore ship platform in Santos Bay, off the coast of Rio de Janeiro, Brazil on Oct. 28, 2010. Silva left the helm of a nation transformed from a perennial underachiever into one with economic and political clout. less

Brazil's then-President Luiz Inacio Lula da Silva covers his hands with the first production oil sample from the pre-salt layer of Tupi field as he visits a Petrobras offshore ship platform in Santos Bay, off ... more

Photo: Felipe Dana / AP

Image 8 of 27

Greenpeace activists use simulated oil to protest an oil spill in an offshore field operated by Chevron Corp, outside Chevron's offices in Rio de Janeiro, Brazil, Friday Nov. 18, 2011.

Greenpeace activists use simulated oil to protest an oil spill in an offshore field operated by Chevron Corp, outside Chevron's offices in Rio de Janeiro, Brazil, Friday Nov. 18, 2011.

Photo: Silvia Izquierdo / Associated Press

Image 9 of 27

Petrobras workers walk on platform 51 "Majuro" in Angra dos Reis, Brazil on Aug. 21, 2008. An enormous offshore field in territorial waters, then the biggest oil discovery in the Western Hemisphere in 30 years, had Brazilians saying, "Drill, baby, drill," while environmentalists worried the forward-thinking nation would take a big leap backward to focus on crude. less

Petrobras workers walk on platform 51 "Majuro" in Angra dos Reis, Brazil on Aug. 21, 2008. An enormous offshore field in territorial waters, then the biggest oil discovery in the Western Hemisphere in 30 ... more

Photo: Ricardo Moraes / AP

Image 10 of 27

A P-34 Petrobras' platform, left, is seen 75 miles east of Vitoria, Brazil on Sept. 2, 2008.

A P-34 Petrobras' platform, left, is seen 75 miles east of Vitoria, Brazil on Sept. 2, 2008.

Photo: Eraldo Peres / AP

Image 11 of 27

A Petrobras worker removes the first oil extracted under a thick layer of salt beneath the ocean floor onSept. 2, 2008 on the P-34 Petrobras' platform, 75 miles east of Vitoria, Brazil. An enormous offshore field in territorial waters, then the biggest oil discovery in the Western Hemisphere in 30 years, had Brazilians saying, "Drill, baby, drill," while environmentalists worried the forward-thinking nation will take a big leap backward to focus on crude. less

A Petrobras worker removes the first oil extracted under a thick layer of salt beneath the ocean floor onSept. 2, 2008 on the P-34 Petrobras' platform, 75 miles east of Vitoria, Brazil. An enormous offshore ... more

Photo: Eraldo Peres / AP

Image 12 of 27

A Petrobras worker removes the first oil extracted under a thick layer of salt beneath the ocean floor on Sept. 2, 2008 on the P-34 Petrobras' platform, 75 miles east of Vitoria, Brazil.

A Petrobras worker removes the first oil extracted under a thick layer of salt beneath the ocean floor on Sept. 2, 2008 on the P-34 Petrobras' platform, 75 miles east of Vitoria, Brazil.

Photo: Eraldo Peres / AP

Image 13 of 27

Petrobras workers walk on platform 51 "Majuro" in Angra dos Reis, Brazil on Aug. 21, 2008. An enormous offshore field in territorial waters, then the biggest oil discovery in the Western Hemisphere in 30 years, had Brazilians saying, "Drill, baby, drill," while environmentalists worried the forward-thinking nation will take a big leap backward to focus on crude. less

Petrobras workers walk on platform 51 "Majuro" in Angra dos Reis, Brazil on Aug. 21, 2008. An enormous offshore field in territorial waters, then the biggest oil discovery in the Western Hemisphere in 30 ... more

Photo: Ricardo Moraes / AP

Image 14 of 27

Brazil's then-President Luiz Inacio Lula da Silva, right, and Petroleo Brasileiro SA then-president, Sergio Gabrielli, show their hands covered with oil during a visit to the P-34 offshore platform, 120 kms (75 miles) east of Vitoria in the Atlantic ocean, Brazil, on Sept. 2, 2008. less

Petrobras workers pose in front of the P-52 oil platform during its launching ceremony in June 2007 in Angra dos Reis, 300km south from Rio de Janeiro, Brazil. Brazil had discovered a new offshore oil field that professed to be the third biggest field in the world. The find, located off the southwest coast, was calculated to hold 33 billion barrels of oil. less

Petrobras workers pose in front of the P-52 oil platform during its launching ceremony in June 2007 in Angra dos Reis, 300km south from Rio de Janeiro, Brazil. Brazil had discovered a new offshore oil field ... more

Photo: ANTONIO SCORZA / AFP/Getty Images

Image 16 of 27

Brazil's then-president Luiz Inacio Lula da Silva holds samples of biofuel produced from sugar cane bagasse, during a visit to the Petrobras Development and Rersearch Centre in October 2007, in Rio de Janeiro. less

Brazil's then-president Luiz Inacio Lula da Silva holds samples of biofuel produced from sugar cane bagasse, during a visit to the Petrobras Development and Rersearch Centre in October 2007, in Rio de ... more

Photo: VANDERLEI ALMEIDA / AFP/Getty Images

Image 17 of 27

Then-Brazilian President Luiz Inacio Lula da Silva (C) congratulates Petrobras technicians and engineers (in orange coveralls) beside then-Petrobras president Sergio Gabrielli (R) and Rio de Janeiro's governor Sergio Cabral, during the launching of the P-52 oil platform in June 2007 in Angra dos Reis, 300km south from Rio de Janeiro, Brazil. Brazil had discovered a new offshore oil field that professed to be the third biggest field in the world. The find, located off the southwest coast, was calculated to hold 33 billion barrels of oil. less